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tv   Bloomberg Markets European Close  Bloomberg  March 1, 2016 11:00am-12:01pm EST

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this is the european close. vonnie: we will take you from new york to london to capitol hill in the next hour. this is what we are watching. shares of barclays down 8% as it misses estimates and slashes it dividends. glencore earnings less than forecast. portugal'sll talk to lan to stimulate growth and ease austerity measures. vonnie: apple will argue its case for congress today. john carlin joins us on the debate between privacy and security. we are a half hour away from the close of trade. tell us what is going on in
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today'session. , the stocks are rising longest winning streak since october of last year. the 2016 we have had. investors looking at deteriorating chinese manufacturing data. focusing on the cut to the reserve requirements here yesterday in china. the stoxx 600 as february fell for the third consecutive month. the longest losing streak since may of 2012. barclays shares are down by almost 10%, the biggest drop since 2012. a four-year chart. shares temporarily expended. stake inown its 62% business over the next couple of years. unit,moving, a non-core it is all happening for the bank that is barclays.
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glencore shares 3.3% lower today. falling byome items 59%, less than estimated. oil.s for metal and what is interesting is ivan, the chief executive, said commodity prices have bottom and sales to china are pretty good. we will find out later why he believes commodity prices have bob -- blossomed. vonnie: china is not alone in -- releasing factory dated today. mark: this is a beautiful chart, manufacturing in the u.k. going back to 2013. 50, thearrowly above line separating step -- and contraction. it is the lowest level in three years.
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this will raise questions. and we have got uncertainty out there. the big uncertainty, manufacturing is not the biggest part of the u.k. economy. services is. the fact that it has fallen to its lowest level in three years, certainly making sure there are flashing red lights about the uncertainty facing the u.k. economy. vonnie: we do not like to see .hat particularly at this time we are 19 minutes into the trading day so let's head to the market desk were julie hyman has the latest. hanging onee stocks to gains. an uptick in volume for the s&p 500 over the 20 day average as stocks hold near the high of the day. we see some strength in technology. it is interesting today that oil
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is not performing as well and yet stocks are meant to hold onto gains. , the s&p 500 in white and then the oil prices are in yellow. we have seen a downturn occurring oil prices and they remain little changed even as stocks told on earlier gains. interesting today that we are seeing the decoupling that we will see some central banks take action to try to prop up economies and markets. mark: not just stocks in the news. julie: we're looking at the treasury market as well. the big notable headline in treasuries today, the japanese avernment selling debt at negative yield for the first time, $9.5 billion at a yield of -0.0 24 percent. we are seeing yields around the globe actually strengthened on
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this, interestingly enough, except for the japanese tenure, for the moment not changed. what is remarkable about the bond sale is not only that it was negative yield, but the there was huge demand. ratio on this option, 3.2, that means 3.2 times as many bids as there were securities available for sale. the white line that takes a look at that ratio, the access on the left-hand side. here is the yield on the japanese government bond 10 year and the yield going into negative digits. it is just remarkable, the fornd you are seeing basically, you pay the japanese government to loan you money. is not just that on sale, but the economic data you got 10:00 a.m.
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manufacturing showed better than estimated, a bit of stabilization. that bump up in the dollar. we are seeing at fault. it is recovering a little bit today but still lower versus the u.s. dollar. vonnie: the forward-looking components of it were better looking as well. thank you. let's check the news. from our newsoe desk. courtney: bernie sanders says he needs high voter turnout to do well today. the democratic candidate voted in his hometown of vermont. voters trailat hillary clinton in most states. put someump hoping to distance between him and his rivals in the republican race. leading in all except for texas.
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president obama meets today with republican leaders to promise to block anyone he names to the supreme court. the seat openeep for a republican president to fill. is expected to discuss historical precedent for confirming justices in an election year. the council votes today whether to report more economic sanctions. the move comes after two months in kim jong-un's regime. prevent -- s would fiat chrysler is crushing u.s. sales as it for february. fiat'ceo telling bloomberg news is expecting more of the same. collects the market is all right. it is confirmation of what i have been saying all along. i see no indication the numbers will be substantially less or
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less than they were the year before. vonnie: fear chrysler is embarking on-- biggest expansion in new york in a decade. dayal news 24 hours a powered by our journalists and more than 150 news bureaus around the world. vonnie: thank you. 30% thisstock is down year, nine percent today. investors showing concern over barclays outlook at the bank slashed its dividend. the new ceo is trying to reassure investors after the stock plunged. he sat down with donna edwards earlier today to explain what he plans to do. >> we will simplify the bank to be a transatlantic bank to be focused on a consumer business, corporate business, and our investment bank. we have a number of investments
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generating double-digit returns today. card, the number one credit card issuer in germany. u.s., generating double-digit returns. lots of investment there. what we are doing with technology in the retail banking business and the u.k., we we are at the forefront there and generating great returns and growth there. and were a lot of places will be doing so to enhance shareholders value. >> you use the word double-digit. all hitting that here the investment bank is not. when is the possibility of a double-digit return at that investment bank? the market wants to know essentially what you will do? will the investment bank make a double-digit return? >> the most important issue is the core franchise today. our consumer business, corporate
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business, and investment banking. generates anchise return on tangible equity and double digits today. that is important and i think the street needs to get its hand around it. the investment banking industry now is not covering costs of capital. in our view, you cannot rely on bank balance sheets to fund economic growth. we need a robust market. i have to believe a robust market in the banking industry will have to be financially healthy and it will be. mark: the barclays chief executive there. we are joined now with more on the bank's challenges ahead. is the big thumbs down for barclays shareholders today. >> it seems to be a common theme in the early season that european bank ceos cannot get it outt when they put strategy.
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with of it has to do capacity of the plans they made, the lack of any concrete evidence of when this thing will be turned around. mark: exiting africa, a good or bad move? >> barclays are arguing they cannot get the full it's with this unit having been only a minority shareholder and it would only be valuable in minorities hands to her that is part of it. they wanted to keep it. make it work with the latest rules and regulations. is it because they slashed dividends? >> it is in response to an unexpected slashing of dividends in half. the prices have actually gone up. they liked what he has done today. there are two stories here.
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sees hard for investors to where the growth will come from. we have to see an approval in the general environment. vonnie: if he does indeed ditch the other units, quickly, will barclays be able to outperform credit suisse and deutsche bank? seeing the ones that get dirty work done quickest 10 to be favored by the market. way ofseeing a good running down the other u.k. based vendor, which had historical problems with the investment bank. be seen howo quickly the ceo can actually get their assets out the door. mark: when will we be done with the never hundred -- never ending restructuring we have been talking about for weeks? in at the beginning of december and said today that there does need to be an
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, apoint to this and during very frustrating thing to staff and investments. as a new ceo, it is his prerogative to/targets and blame it all on the previous management. unless we start seeing may be some of these changes have a positive impact on the bottom line, deeper questions will have to be asked about the state of business. mark: the chairman of july said they would double share prices in the next three or four years and we will see. thank you. great to talk to you. european close, shares of the london stock exchange are soaring today amid a possible bidding war. what could stand in the way of the deal? we will break it down for you next. ♪
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mark: this is the european close. feeling the love today. on news the international continental exchange, already in talks. who will win the potential bidding war? john joins me now to figure it out. is an offer likely? >> looks possible. a week ago, they confirmed they looking to reach an agreement.
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it looks like they are looking to put their foot for. -- forward. they think it is a possibility so they are weighing it. they are talking to morgan stanley about such an offer. vonnie: who would be more likely to be palatable to regulators? john: that is the $20 billion question. you could see it both ways. they have had good luck in the past doing big acquisitions. perhaps european regulators feel differently about the deal and maybe they look at it and say, there is not as much overlap because of the type of assets they are involved in.
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people i have talked to, nikki is a consultant used to be a market structure expert. she suggested they may both have potential and regulators may not be the deciding factor. it will probably take a long time to find out. vonnie: a great story and a great chart on the bloomberg today. future?the that is a good question. obviously notyer feeling the love at the moment. we will have to see if this is temporary. they do not have the diversification with data and
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other asset classes. mark: the merger would give europeans a champion in london with theuld compete big derivatives market. is it a better fit or is there a case to be made that it is a benefit? you could probably make the case for both sides. it was not long ago when a stock exchange ceo -- his predecessor is seeking life, the derivatives succeeded and made a bid and succeeded in acquiring llc, ella put the clearing business back together. ,heir division back together which some say could be quite powerful. it would not be unheard of. vonnie: thank you so much, john.
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toyota has reported several total vehicle sales that beat estimates. sales to be up 4.9%. carmakers have been beating except for volkswagen down 14%. glencore's worst year as a public company in shares. the company's biggest shareholder about what the future holds for commodities traders. ♪
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vonnie: this bloomberg markets. i'm vonnie quinn. 2015 was glencore's worst year and is adjusted net income funds 69% commodities prices. tumbled and shares fell 50% in the past year. earlier today, david, chief investment officer and one of glencore's's largest
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whatholders spoke about the company needs to focus on going forward. >> at this stage, they flag that debt reduction is a major priority. we are going from $40 billion to $16 billion and by the end of this year. want to focus on the short term in this debt reduction. once you are at a comfortable leverage position, we can look at other ways of dispersing that free cash flow. we should mention the chairman of bloomberg elk -- lp is an executive director at glencore. joining us now to get deeper analysis into those earnings, and metals and mining reporter for bloomberg debt. that is the key. it missed its target for the last year. ford harris says that is
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him a big shareholder, the most important thing, getting the debt lower. quite exactly right. remember glencore had a lot lot to bring that down a more today. they cut that even further care they want to cut it down to 17 billion by the end of the year. they will do that by selling more assets and increasing the debt target sales. we start to see big-ticket sales coming through in the second quarter. have aoes every cloud dividend? we are talking about the reinstatement of the dividend. surprise, a bit bizarre. it sends a bullish signal that
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they think they are out of this. not sure where they will go this year but the fact they are talking about returning to the dividend this year -- the big man, what is he -- basing this fine analysis on? >> there has been a real lack of investment in the past 12-24 months and there will be a real lack of supply. the point that in years gone past, that is what one company would spend in a single year. he is quite bullish on china, which is surprising. bestys last year was the year, one of the best they have had. everything you need to know on glencore today.
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let's look at the data check for the moment. 10 nine mark.the gold futures as well are not on the board but they have turnaround -- turned around. mark: we are up for the fourth consecutive day. formative left of the deck -- the equities session per we have not risen for four days since october. that is my favorite fact of the day. these are the big movers and i will tell you about all of these stocks in a minute. barclays is the big story of the day. shares were down by 11%. held.ere temporarily stay with us. ♪
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london in newm york, this is the european close. i'm mark barton. vonnie: and i'm vonnie quinn in
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new york. we are colder, but it is brighter. mark: have a look at the stoxx 600 up for the fourth consecutive day. that has not happened since october last year. that's after the benchmark measure for european shares fell for the third consecutive month. investors ignoring disappointing chinese data, focusing on the fact they cut the reserve requirements. barclays shares were suspended earlier. they were down 11%. shares almost at the lowest level since 2012 today. selling down its 62% stake in its africa business. in half.ting dividends that was the big shocker today. glencore shares down by 2.4% today.
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less than estimated today. commodityws came from prices bottoming. , he saidw months ago there was no visibility in china. how things have changed for the big man at glencore. iceie: a lot going down, considering making an offer for lse. how have stockholders been reacting? mark: they loved it. record high for lse today. quite possibly we have a bidding war on our hands. will give arse formal offer later this month. lse shares rising to a record. ice has not approached it. that merger between lse and deutsche boerse will be 20
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billion pounds and it could cme.te with ice as well as propelling shares of lse to record levels today. vonnie: u.s. markets are still open, but they are in the green and rising. the s&p 500 is up. the dow is up 1.4%. the nasdaq is up. they are all at session highs. abigail doolittle has more. abigail: we certainly have the nasdaq in full rally mode. nearly 2% on the day. majorforming the other averages. some of the top leaders into -- in technology are here today, including facebook and apple. upd resort shares are
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nicely. of wind resorts revenue. resorts revenue. to explainuld help why wynn resorts is trading at a five-month high. shares of this chipmaker are down after the stock was downgraded at merrill lynch. lowered estimates citing limited multiple expansion. vonnie: thank you. portugal's new leadership is trying to spark growth and easing austerity measures. portugal bonds tumbled last month. yields soaring on concerns the
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socialist minority government will not do enough to curb the deficit. joining us now is the finance minister of portugal, mario centeno. portugal's 10 year yields spiked. they have come back. can the ecb do more to avoid these spiking yields in countries like yourself? >> thank you for having me. it's a joint work. from our side, we are pretty much committed to keeping the to curbation process on the debt over gdp ratio. we need to strengthen our financial sector. then all of the possible measures done by the ecb. mark: when we see spikes like that, does it show the limit of
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the ecb's -- portugal's yields are above the level of when the ecb first announced their program last january. does that show its limits? >> it means we have to work harder. that's my point. we need to bring the euro zone economy to a more sustained growth. countries like portugal will gain a lot from that. course i'm sure the ecb is quite attentive. mark: do you want more bond buying? further incursion into negative interest rate territory? what do you expect from the ecb? i will not deny that this will be good news for the eurozone and also for portugal. we need also patience to see
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if these measures are having an effect on the real economy. mark: are we behind the days when portuguese yields were below 10%? >> i think so. the job of the government is also to reassure markets that the commitment to leaving these times behind us is very firm. for growth islook different to the european commissions. we had finance ministers telling you to make plans to cut the budget further in case you run into trouble meeting your targets. are you willing to do that and how? >> the expression is "when necessary." mark: and you don't think it's going to be necessary. >> we don't think it's going to be necessary. the vast majority of it depends
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on our action. we think we are going to be able to deliver. if necessary or when necessary, we will pretty much as we did in the last four weeks, we will show our very clear commitment to take the necessary -- mark: more on the tax side or pen -- spending side? >> we think it is time to make a tax shift from direct to indirect taxation. mark: so you will continue along that path. the budget went through with the support of the communists and the left bloc. will that support remain? do you expect to remain as a minority government for the entire tenure? history says it's not going to happen. >> people said that before as well. i think all political parties that signed the agreement show how important it is to commit
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and to fulfill the commitment. we had an agreement with those that already has room for maneuver for the government to adapt the policy in case it's needed. we had to do that. we had the ability through dialogue and negotiation with them to reach this two-sided agreement. mark: will next year's be easy? >> no budget is easy. we face many challenges and we will be very focused on execution and also preparing next year's. your debt burden is 128% of gdp. -- when will this debate take place about renegotiating your debt? >> we think these are european
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teams. -- themes. this is the matter to be taken at the european level. we are not going to promote or call for such a process. the ability ofe sustaining growth. our growth levels are increasing. they need to increase in a sustained way with the confidence that we can transmit to the markets. also for financing the debt. will come up in terms of european discussion in case. mark: and when it comes to it, will you be looking for cutting the interest rates? be completely clear with you, i think this needs to be arranged at the european level with the european framework and not specifically targeting our case or other
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special cases. mark: let's get to your rating. what is standing in the way of you being investment-grade again? we are in permanent contact with the agency. the revision of these grades takes a long time. it's a matter of fact that we are being revised at a very slow pace. we need to reassure those agencies of all the commitments that we've been repeating on and on the fiscal responsibility but also on structural reforms to put portugal to grow. only structural reforms will allow portugal to regain momentum. mark: you've been critical of the central bank to impose losses on certain bondholders.
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the central bank is independent. wednesday going to be sold? -- when is it going to be sold? who's going to buy it? >> the selling is a matter for the resolution -- we are following it very closely. it has just been relaunched, the process of selling. important for the system that it is a success story. occur duringill the course of next year. that's the plan. we got an extension of one year by the european commission to novo banco. we all know that delay does not help us in reaching the deadlines.
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we need to be very assertive in the process. mark: thank you for joining us today. the portuguese finance minister, mario centeno. back to you. next on bloomberg markets, we are taking a look at oil shooting higher. and we will be talking to the top security experts in the world. they are all gathering in san francisco at the rsa conference. we will be talking with the assistant u.s. attorney general. that's john carlin next, on bloomberg markets. ♪
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than an hour,e the fbi director and apple's top
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lawyer will testify in front of the house judiciary committee over encryption and privacy. favor ofuled in the text giant over a request to unlock the iphone. tim joins us live. see apple try to frame the debate as, should the government prohibit them from making devices to protect your personal data? vonnie: we had developments. a judge has ruled in favor of apple in a similar case. i'm not sure the fbi would call it a similar case. thet is definitely a win in public relations category. the court fight is separate from what's going on today. this is about framing the national debate on privacy. vonnie: what will apple attempt to do in front of the house judiciary committee? win overill try to
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independent minded lawmakers who have not decided where they fit on this issue. vonnie: have you been talking to congresspeople on capitol hill? >> this is one of those issues that does not come down on party lines. there is opposition on the r&d side and there people who have not decided. we will be looking closely for reaction during the hearing. vonnie: that is starting at 1:00. run?ong will it >> we are expecting it to go quite a while. vonnie: thank you, tim higgins on capitol hill. we will have full coverage of the hearing starting at 1:00 p.m. eastern. this apple case is grabbing the nations attention on how stronger encryption and national security works. we are joined now by john
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carlin, assistant attorney general. he is at the rsa conference in san francisco. it is all about security. thank you for joining us. you are right at the center of the debate between cyber security and privacy. on howo you come down much we should reveal in order to keep the nation safe? both.believe strongly in in the national security space, our job is to help support companies use strong encryption to protect their data from cyberattacks, spies, terrorists. at the same time, we need to be able to have access to some of that information through court orders in specific investigations of terrorism. i think the two are linked. in order to have the best
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security, we need both good encryption and the ability to use lawful court process. involvedou were very in the prosecution of the boston marathon bomber. would you have needed this software in order to do that? >> in almost every terrorism investigation, part of the investigation is finding information that is stored digitally. it might be information we need to get that is in transit. overseas talking to another terrorist in the united states. or information that is at rest on people's computers or phones. the same way we use search warrants to get papers and documents. day in and day out, it is a key investigative tool that the fbi uses. vonnie: i only bring it up because you successfully managed to prosecute that case without
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needing this software from a tech company. why now? you have to look at the specific facts of every case. with this particular company, they have complied with court orders in 70 other cases. they changed strategy. they are no longer going to provide the cooperation they used to provide. they have chosen to litigate. in this particular san bernardino tragedy where 14 people lost her lives, there is an apple customer. and that customer is the county and the customer asked for their help. they want to know what is on that phone. this is one set of facts. vonnie: exactly. that is one of the defenses, of course, coming from the justice department in this case. apple is making the point that this could set a precedent.
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you are also highly involved in the sony entertainment hacking investigation. you have seen what detrimental hacking can do. what makes you sure it is the right thing to do to open another avenue to that potential? >> absolutely. we were involved with the sony hacking case. premierut here at the security conference in the world. the attorney general will be speaking later today to encourage people to have the best security they can to protect themselves against that type of threat. we need to look carefully at the specific facts in each instance. in the san bernardino case, there is a customer who wants a system the person who provided them the phone. here they have a technical solution. they have said it will take a couple of weeks for them to get the information off the phone. the fbi is not asking for any type of code or to keep that permanently.
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they could destroy the code after they get the information off the phone. as the assistant attorney general, you are the people's lawyers. apple would say it is working on behalf of its customers. how do you talk to silicon valley? not just apple. facebook, google. how do you guys collaborate? criticalabsolutely that we work together on a new series of threats. we are seeing terrorists take advantage of american ingenuity in technology to pose threats they have not posed before through social media. recruiting terrorists in the united states. cyber attacks. found is a very receptive audience. to explainob
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honestly what we are seeing. out here you have a bunch of problem solvers. whatever the general rhetoric -- once you get down to, here is the threat we are facing, they start trying to solve that problem and bring the creativity they brought to developing the product in the first place to combating terrorist threats. vonnie: assistant attorney general, thank you for speaking with us today. carlin, assistant attorney general at the rsa conference in san francisco. emily chang will have an exclusive interview with u.s. attorney general loretta lynch live at 4:00 p.m. eastern. ♪
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vonnie: this is bloomberg markets. i'm vonnie quinn. time for our battle of the charts. kicking things off, joe weisenthal.
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a long time, it looks like the bank of england might hike. things have really changed in the last few months. this charge is morgan stanley's measure of market implied months to first type. for a long time, the market was , while the ecb was implying 30 months. since the start of the year, it has surged at the boe. the market does not see a hike for about 15 months. more than the ecb with brexit concerns, people have really pushed back their timing for a hike. you can find that on the terminal. vonnie: what have you got? mark: how do you double your money in six weeks? invest in anglo american six
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weeks ago. you would be sitting on a gain of 122%. 83%.ore up by the gold and silver producer up by 46%. the gold producer up by 43%. this is interesting. this is how they fared from their peaks. glencore, 75 lower. how to make your money in six weeks. vonnie: joe weisenthal wins this week. for notld be penalized having told me that six weeks ago. ♪
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alix: it is noon in new york. welcome to bloomberg markets.
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from bloomberg world headquarters in new york, i'm scarlet fu. alix: and i'm alix steel. we are seeing the best first day of march in 14 years. we will see if they have some staying power. berkeleyshares of taking a dive. cost-cutting lies ahead. alix: apple and the fbi prepared to face off in a security versus privacy hearing. we will have it live for you when it happens. scarlet: we want to get a snapshot of today's market activity. julie hyman has been tracking the latest session highs. march 10 supposed a 2.2% gain. julie:


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